Liquidation starts for bankrupt DRAM maker Qimonda

TAIPEI, 5 AUGUST 2009 - The sale of advanced chip factory equipment at the final plant run by bankrupt DRAM maker Qimonda AG has started on the Web site of auctioneer GoIndustry DoveBid Group.

The German company in January became first among major chip makers to file for bankruptcy protection amid the global economic recession. DRAM makers globally have been suffering from a chip glut that started two years ago and sent chip prices well below the cost of production. The recession cut further into their business and made it harder to take out loans.

Online auctions of two major portions of Qimonda equipment at go-dove.com will end on Sept. 21, according to information on the site. The auction was ordered by Michael Jaffé, insolvency administrator of Qimonda Dresden GmbH & Co OHG, a notice on the site says.

Neither Qimonda nor the insolvency administrator could be reached for comment.

Qimonda was a top competitor in the global DRAM business for three years before the chip glut and recession hit its operations. The company was spun off from Infineon Technologies in 2006. Thousands of Qimonda employees are out of work as a result of the bankruptcy.

The end of Qimonda also means the end of trench chip production technology -- a method of etching memory cells on DRAM chips -- unless some licensees continue to develop it. Qimonda has licensed the technology to some partners in Asia, including Taiwan's Winbond Electronics, but had always led development efforts.

Qimonda was the only major chip maker using trench technology in memory chips, and without the German chip maker, it's doubtful other companies will continue its use. The rest of the DRAM industry uses a rival production technique known as stack technology.

The global DRAM industry continues to reshuffle amid the recession. Taiwan has offered to inject money into one or two companies to lead consolidation efforts among the island's DRAM makers, including Taiwan Memory Company (TMC) and another company or group, likely led by DRAM makers in the Taiwanese conglomerate, the Formosa Plastics Group.

Global DRAM revenue slumped to an eight-year low in the first quarter of this year, according to Gartner. The market researcher said DRAM market revenue fell 41 per cent year-on-year to US$3.57 billion in the first quarter, the lowest since the fourth quarter of 2001.